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Saturday, February 22, 2014

FSB must examine PIC investments - David Ross

David Ross
16 February 2014

DA MP questions whether Board of Trustees of the GEPF are acting in accordance with their fiduciary duties

In the latest of a series of worrisome investments by the Public Investment Corporation (PIC), pensioners' savings have once again been put at risk the PIC's R3 billion investment for 30% of Camac Energy Inc. Camac Energy is linked to Kase Lawal, a Nigerian-American with a very dubious record and strong connections with President Zuma (see here).

According the Mail & Guardian, Camac's only producing asset is 60% of the Oyo oil field off Nigeria, whose yield has declined from 25 000 barrels a day in 2009 to 2 000 now. Last year Camac was burning up US$1 million a month, and its third quarter report reflected that current liabilities exceeded current assets by US$13.4 million.

This deal comes after a string of controversial investment decisions by the PIC including the purchase of a potentially over-priced share of the Kalagadi Manganese mining company from ANC-connected bigwig Daphne Mashile-Nkosi for R3.9 billion just a few days ago, as well as a R500 million investment into the Independent Group, and a R19 billion cash injection into the South African National Roads Agency Ltd.

This again raises serious questions about whether the PIC is making objective investment decisions in the interest of the 360 000 government pensioners and 1.2 million active members of the Government Employees Pension Fund (GEPF), or is risking their pensions to benefit the politically connected.

The DA will do everything possible to protect vulnerable pensioners. I have therefore already launched an application in terms of the Promotion of Access to Information Act for the investment strategy of the GEPF. We have also written to the Public Protector, Adv Thuli Madonsela, requesting urgent intervention with regard to the controversial decisions by the PIC to invest in Kalagadi Mangenese and Camac Energy Inc.

We will this week further request an urgent interview with Rosemary Hunter of the Financial Services Board.

It is time for the FSB to investigate whether the Board of Trustees of the GEPF are acting in accordance with their fiduciary duties.

South Africans need to be assured that their hard-earned money is not being misused by cronies to benefit the politically connected. We will continue to do everything possible to ensure that this happens.